Market Report 20-04-2022

Published: 20/04/2022 By ECAP

The Greenback continues to take centre stage as the best performing G10 currency as investors ramp up their bets in favour of tighter Fed policy and increase in US interest rates. The US Treasury yield has risen to the highest point level of December 2018 posting a figure of around 2.9%. Bullard, one of the most hawkish members of the FED was quoted as suggesting that inflation was far too high and that interest rates were required to be at 3.5% by year end, suggesting a further 300 points worth of hikes to come this year from his point of view.

Central bank member speeches become the focus for this week, with Jerome Powell, Christine Legarde and Andrew Bailey due to speak at the IMF panel this Thursday. Eyes and ears will be focusing on the rhetoric from the speeches to gain any potential insight as to future monetary policy from the heads of each central bank. Arguably, the most analysed will be Andrew Bailey, as the Bank of England is widely noted as the most dovish in its recent communications in comparison to the ECB and FED. With inflation soaring to 7% and looking likely to surpass the MPC's projections it will be key to see the BoE's stance and future stance on monetary policy.